Volkswagen Dieselgate update: Porsche owners are angry, VW dealers score $1.2 billion compensation

August 26, 2016

After a few quiet weeks, the Volkswagen Dieselgate fiasco has come roaring back to life. Is it the beginning of the end of the scandal? Eh, not likely:

1. VW plans $1.2 billion compensation package for U.S. dealers: VW dealers have not been a happy bunch for the past 11 months. They've had to contend with horrible headlines, furious owners, and plummeting sales. They've repeatedly tried to communicate with VW reps in Germany, hoping to secure some kind of compensation package and to gauge the brand's long-term commitment to the U.S. market.

Now, they may have succeeded on one of those fronts: over the next 18 months, VW has agreed to dole out $1.2 billion to its 650 U.S. dealers, which will cover the rapidly shrinking value of those shops as well as VW inventory that couldn't be sold. Additional benefits like advertising support may also be offered--provided the compensation package is approved by a judge.

2. Porsche owners are peeved: In late June, Volkswagen agreed to a massive $15.4 billion settlement package, which will fix or buy back 475,000 U.S. diesels equipped with defeat devices and compensate owners, no matter which option they choose. Now, owners of Porsche diesels are getting angry because they haven't been offered a similarly attractive package.

Unfortunately for them, the June settlement only covered Audi and VW 2.0-liter diesels. Resolving problems with 85,000 larger Audi, Porsche, and VW 3.0-liter diesels has been tricker--in fact, the California Air Resources Board recently rejected Volkswagen's second proposal on the matter, and there's some question as to whether the vehicles can ever be fixed. Hopefully, Porsche owners can be patient a little longer. We wouldn't be surprised if there were a buyback program in the works. 

3. Payouts to 19 states may be coming, too: The $15.4 billion package Volkswagen agreed to in June is mostly focused on VW and Audi owners, with a little money set aside for zero-emissions technology research and federal fines. There's also $600 million earmarked for settlements with 44 states, the District of Columbia, and Puerto Rico. However, as many as 19 states have filed additional claims against the automaker, citing environmental damage. The claims will be combined into one case, which will be heard in October or November. Sounds pricey, no?

4. Data stolen by former employee could yield clues for investigators: Not so long ago, an employee of German supplier Bosch stole a trove of software data related to the engines that Bosch had built for Volkswagen. The employee was found guilty of theft and of planning to sell the data to other automakers.

While that case is officially closed, investigators in Germany are now looking at the stolen data, which was gathered from 2009 to 2011--precisely when Volkswagen began using its illegal defeat devices. Whether the data will yield any evidence to further incriminate Volkswagen remains to be seen.

5. Some VW sales personnel are getting poached by other dealerships: Then again, given all the bad press and VW's slump in sales, some staffers may have been easy pickings.

6. Harley-Davidson hit with $12 million fine: It's no secret that the EPA has been looking at emissions more closely since the Dieselgate scandal broke last September. Now, Harley-Davidson has been busted by the U.S. Justice Department for selling 340,000 aftermarket defeat devices that allowed the company's motorcycles to emit more pollutants than permitted by law. 

What else is in the works? Apart from the 3.0-liter diesel settlement, there are scores of lawsuits from individual diesel owners, plus a federal investigation into potential criminal activity by Volkswagen. So, no, Dieselgate isn't over. Not by a longshot.

Note: for purposes of clarity, "Volkswagen" has been used to refer to the Volkswagen Group parent company, while "VW" has been used to refer to the company's popular mass-market brand of automobiles.

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